Question

The general ledger of Zips Storage at January 1, 2021, includes the following account balances:

Credits Debits $ 26,100 16,900 15,000 163,000 Accounts Cash Accounts Receivable Prepaid Insurance Land Accounts Payable Deferred Revenue Common Stock Retained Earnings Totals $ 8, 200 7,300 158,000 47,500 $221,000 $221,000 The following is a summary of the transactions for the year: 1. January 9 Provide storage services for cash, $149, 100, and on account, $59,700. 2. February12 Collect on accounts receivable, $53,000. 3. April 25 Receive cash in advance from customers, $14,400. 4. May 6 Purchase supplies on account, $12,200. 5. July 15 Pay property taxes, $10,000. 6. September 10 Pay on accounts payable, $12,900. 7. October 31 Pay salaries, $138,600. 8. November 20 Issue shares of common stock in exchange for $42,000 cash. 9. December 30 Pay $4,300 cash dividends to stockholders. Insurance expired during the year is $8,500. Supplies remaining on hand at the end of the year equal $4,400. Provide services of $13,300 related to cash paid in advance by customers.

Answer 1

Prepare Income statement as follows:

Zips Storage
Income statement
For the year Ended December 31, 2021
Revenues:
Service revenue ($149100+$59700+$13300)		$222,100
Less: Expenses
Salaries expense	$138,600
Insurance expense	$8,500
Supplies expense ($12,200-$4400)	$7,800
Property tax expense	$10,000
Total operating expense		$164,900
Net Income		$57,200

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Prepare statement of Retained Earnings as follows:

Statement of Retained Earnings
Beginning bal.	$47,500
Add: Net Income	$57,200
Less: Dividend	($4,300)
Ending bal.	$100,400

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Prepare Balance Sheet as follows:

Zip Storage
Balance Sheet
December 31, 2021
Assets		Liabilities
Current Assets:		Current Liabilities:
Cash	$118,800	Accounts payable ($8200+$12200-$12900)	$7,500
Accounts reecivable ($16900+$59700-$53000)	$23,600	Deferred revenue ($7300+$14400-$13300)	$8,400
Prepaid Insurance ($15000-$8500)	$6,500
Supplies	$4,400	Total Current laibilities	$15,900
Total Current Assets	$153,300	Stockholders' equity
		Common stock ($158000+$42000)	$200,000
Land	$163,000	Retained Earnings	$100,400
		Total Stockholders' equity	$300,400
Total Assets	$316,300	Total Liabilities and Stockholders' equity	$316,300

Working:

Cash
Beg. Bal.	$26,100	5	$10,000
1	$149,100	6	$12,900
2	$53,000	7	$138,600
3	$14,400	9	$4,300
8	$42,000	15	$10,000
End. Bal.	$118,800

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